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Officials at the D.C.-based Advantage Healthplan say the company might close after the D.C. government chose not to extend its multimillion-dollar contract to provide health insurance for nearly 4,000 city Medicaid recipients.

“Advantage cannot survive as an ongoing business,” Elliot Wolff, executive director of the health plan, said in an affidavit filed recently in D.C. Superior Court.

D.C. health officials confirmed Friday that they have stopped contracting with Advantage, which has provided health insurance for Medicaid recipients in the District for the past decade.

However, city officials said the decision will not affect the ability of the District’s Medicaid recipients to access health care services.

Robert Maruca, senior deputy director of the city’s Medicaid Assistance Administration, said the city has transferred Advantage’s 3,785 Medicaid enrollees to three other health-maintenance organizations “without a break in service.”

However, Mr. Maruca declined to comment on the reason for the move.

“The District of Columbia chose not to exercise the option to extend Advantage’s contract,” he said. “The District has no further comment on this matter, as it is currently in litigation.”

Medicaid is a federal program administered by states to pay for health care for the poor and the disabled. The District contracts with three health plans to provide coverage for Medicaid recipients: D.C. Chartered Health Plan Inc., Amerigroup Corp. and Health Right Inc.

Last month, Advantage sought an injunction in D.C. Superior Court to block the city from dropping the health plan, saying D.C. officials already had signed documents agreeing to extend the contract for about $10 million.

A judge denied the request, and the company is asking the D.C. Contract Appeals Board to overturn the decision.

Mr. Wolff did not a return a phone call seeking comment for this story, but a lawyer for the health plan said no decisions have been made on the company’s fate.

“It’s an option,” said Laurence Schor, lawyer for Advantage, about the possibility of closure.

“What they do now while this issue is being heard at the Contract Appeals Board is something the administration of the company will have to decide.”

“At this point, they’re still financially capable of going forward, and it’s a question of what direction they’re going to go in.”

Mr. Schor said he did not know how much of Advantage’s business depends on the D.C. Medicaid contract. But court documents filed by the company say the “contract represents nearly 100 percent” of its business.

Court documents also show that the city’s decision to drop Advantage was related to a report on the company by the Maryland-based Delmarva Foundation for Medical Care Inc.

City health officials declined to discuss the details of the report yesterday, but Mr. Schor said the findings highlighted “administrative issues.”